NLC in pact with REC for funds

NEYVELI Lignite Corporation has entered into an MoU with Rural Electrification Corporation for funds up to Rs 2,500 crore.

This is in addition to similar arrangements with Power Finance Corporation (Rs 2,500 crore), State Bank of India (Rs 1,000 crore) and the Indian Bank (Rs 400 crore). The company is also in discussion with other banks, Mr J. N. Prasanna Kumar, Director (Finance), told Business Line on Saturday.

The REC loan carries an interest rate of 7.25 per cent. The agreed tenor is seven years, after a three-year moratorium from the date of drawal of the loan. "NLC would avail itself of this facility in a phased manner to finance its various projects," Mr Prasanna Kumar said.

NLC needs these funds for its many power projects. Some of them are: the 3,960 MW Hirma project, the 500 MW Mine-II expansion project and the 500 MW Rajasthan project.

(This article was published in the Business Line print edition dated January 31, 2005)

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